Inflation now 0.1%

With two quarterly falls in prices, annual inflation is now just 0.1%. That’s great for families and consumers.

But we need to look at the difference between the various components. There are some areas with pressure on prices, and others where there is not.

• Prices in the tradables sector have fallen 2.8% while non-tradables are up 2.3%. So we still have inflation in the areas where there is no foreign competition.

The main components have different levels of annual price increases. In order they are:

1. Alcohol/Tobacco 4.2%
2. Education 4.0%
3. Housing 3.0%
4. Health 1.8%
5. Food 1.2%
6. Misc 0.8%
7. Household contents -0.9%
8. Clothing -1.1%
9. Recreation/Culture -1.2%
10. Communications -4.5%
11. Transport -6.4%

Of interest, if the tax had not gone up on tobacco, we would have had deflation of 0.2% over the year.